Nordic Spa

There is an opportunity to build a Nordic spa on the land surrounding Lake Newell. The development near Lake Newell Resort would be the largest spa in Southern Alberta and the only Nordic spa in the province.

Lake Newell Resort is located on the shores of Lake Newell, southern Alberta’s largest and warmest lake. Only ten minutes to the city of Brooks, all amenities are available, including shopping, schools, churches, banking institutions, and health care. Lake Newell Resort is a short drive from several golf courses, including the Brooks Golf Course & Meadowlark Par 3.

This area provides a picturesque setting in which to locate a Nordic spa. Visitors could expect to enjoy a view of the lake, bird watching, and the beauty of Kinbrook Island Provincial Park the natural features of the surrounding areas.

It is envisioned that the Nordic spa would offer a range of spa activities year-round. These would include spa treatments, massages, baths, pools, and saunas. This relaxation and healing centre would mainly be focused on heat therapy, hydrotherapy, and relaxation techniques from Scandinavian countries. It would offer a multi-sensory experience in a surrounding natural setting and is aimed at contributing to the health and wellness of its guests.

Business Description

The main feature of the resort is the bath process whereby customers alternate body warming in the hot baths, Finnish sauna or steam rooms with refreshing cold-water plunges and relaxation sessions. The thermal cycle is a heat therapy treatment that involves alternating between hot and cold, followed by a rest period. This relaxation ritual is based on a 2000-year-old tradition founded in Nordic countries. After completing three or four times, the process is designed to cleanse skin, improve physical condition and provide a sense of well-being.

The first thermal therapy stage is to increase the body’s temperature. During this thermal cycle step, skin pores open, the body stores heat, and toxins are expelled. Sweating cleanses the body from the inside out by eliminating the toxins that have built up over time. These toxins impede proper functioning, which may be a factor in ageing. This step most often involves a Finnish dry sauna, but can also include a Eucalyptus steam bath, hot baths, or a thermal waterfall.

To respect the steps of the thermal cycle and to draw maximum benefit, it is essential to cool the body after the intense heat of the sauna. The second step causes the pores of the skin to close, with a brief but highly beneficial cool rinse in Lake Newell, icy Nordic waterfalls, cold plunge pools, or cool showers.

From 10 to 15 seconds is enough to cool the body. If possible, submerging the head under water provides a more complete experience. A walk in the cold air can also be enough for a gentle experience. The transition from hot to cold produces a thermal shock, which will close skin pores and release adrenaline, a hormone that stimulates the body.

The third and final step of the thermal cycle is critical: 20 minutes of relaxation. It can be fulfilled in a variety of ways: in a hot tub, relaxation pavilion around a fire, hammock, solarium, terrace, or zero-gravity saltwater pool. The final stage in the cycle is recommended to rest the body and heart rate.

The spa should also provide massages and body treatments for an additional fee to offer the full wellness experience. Massage options may include: Swedish, Californian, deep tissue, tonic, Thai, hot stone, lymphatic drainage, and prenatal. Couples massages may also be provided, as well as massages performed outdoors in nature.

A restaurant, bar, spa boutique, and accommodations may also be available at the Nordic spa.

Site

The average Nordic spa requires approximately 30,000-40,000 sq. ft. of space. In general, this includes nine baths (hot, cold, and temperate), nine saunas, an infinity pool, several outdoor relaxation pavilions, one outdoor massage area, and a main complex that includes a yoga and meditation room, restaurant and bar, indoor massage areas, a boutique, terraces, and a parking lot.

The likeliest location for the Nordic spa is the northernmost tip of Lake Newell, near the Lake Newell Resort. Lake Newell Resort is a hamlet in southern Alberta, Canada within the County of Newell that was established in 2007. The hamlet is located on northern shore of the Lake Newell Reservoir, approximately 5.0 km south of Brooks and 3.2 km west of Highway 873. It is accessed from Highway 873 via Township Road 182 to Lake Newell Resort Road.

Lake Newell Resort is comprised of five estates: Blue Heron, White Pelican, Kingfisher Estates, Kingfisher Bay, and Sandpiper Estates. Most of the parcels of land have been purchased by residential owners, with a number of homes already built.

A number of contiguous parcels of land in Kingfisher Estates present a potential location for a Nordic spa. Though these lots are currently owned by Deloitte Restructuring Incorporated, they may be individually sold to different buyers. Therefore, the development of a Nordic spa in this location may require negotiations with multiple landowners.

Several plots in and around Lake Newell Resort are municipally owned as well. In addition, much of the land surrounding the Lake Newell Reservoir is owned by the K300 Financial Corporation. This land may be a potential target for acquisition by a developer seeking to build a Nordic spa.

Map 1 also indicates that very large tracts of land in the surrounding area is owned by the Eastern Irrigation District (EID), which operates under the authority of the Alberta Irrigation Districts Act. The development of a Nordic spa on Lake Newell would likely have to be approved by the EID, no matter the landowner.

EID’s primary business is the management of an extensive water distribution network in support of irrigated agriculture. In addition to conveying water to approximately 300,000 acres of irrigated farmland owned by private families and corporations, the EID also conveys water through their distribution network to benefit municipal, industrial, wildlife habitat and recreational purposes.

EID has indicated that it is open to the development of a Nordic spa if the developer can demonstrate that the facility will not interfere with the operation, quality, and safety of the irrigation system.

Electricity, water, and roads are readily available in the area due to the development of Lake Newell Resort over the past decade. Municipal and privately-owned plots of land within the boundaries of the resort will already be connected to this infrastructure. Developing EID or K300 Financial Corporation land may require utility connection and road construction. However, these will likely be straightforward and economical considering the proximity to a developed area in Lake Newell Resort.

The land surrounding Lake Newell Resort has been designated for residential use for private landowners or has been designated for irrigation use. Contact your local government to determine zoning and permitting requirements. Further investigations and consultations with Lake Newell Resort Developers Ltd., private landowners, and the Eastern Irrigation District may be required.

The following checklist should be used when determining site eligibility:

Check zoning

Ensure proper permits are in place

Confirm business can operate on the designated land

Check environmental regulations and species protection

Determine legal and insurance requirements

Market Attraction

Nordic spas are one of the fastest growing trends in the health and wellness experience market. Over the past decade, Scandinave Spa has opened locations in Whistler, Old Montreal, Mont-Tremblant, and Blue Mountain. The Nordik Group has opened locations in Chelsea and Winnipeg over the same period and is currently in the process of opening a new location in Whitby.

However, no Nordic spas currently exist in Alberta or Saskatchewan, indicating a large gap in the regional market. While a number of hot springs exist in locations like Banff and Jasper, these types of spas offer altogether different experiences.

Overall, Nordic spas tend to attract customers from the wellness market and the luxury market. Though all genders patronize Nordic spas, the clientele and target market tends to skew towards women. In particular, the primary focus is on women in mid to high household income brackets.

Age groups that patronize Nordic spas range from 18 to 65. Within this age group, the clientele tends to skew younger, with those aged 18-40 comprising the largest share of the market. Many would be considered young professionals or millennials. Children under the age of 18 are typically not allowed on the premises, significantly limiting the family demographic.

Clients tend to be single adults and married and unmarried couples. A large section of the market attend Nordic spas on date nights. Many Nordic spa businesses also offer couples packages in partnership with local golf courses, where one member will spend the day at the Nordic spa while the other enjoys a day at the golf course.

Lake Newell Resort is centrally located between the large municipalities of Calgary, Medicine Hat, and Lethbridge. This location would provide the Nordic spa with an immediate market of 1.4 million people within a two-hour drive. In addition, the spa would also enjoy a group of core clients that are local residents of Lake Newell Resort.

Financial Information

Based on a competitive analysis of other Nordic spas that have been developed across Canada, it is estimated that development costs can range from $4M to $12M. The initial investment for the Nordic spa in Chelsea was $4M, though significant expansions have taken place over the past decade. The location currently being developed in Whitby has an initial investment of $12M.

Other factors may impact the investment necessary to develop a Nordic spa. At the Winnipeg location, the harsh winters and complex construction market led to project delays and large cost overruns. Additionally, the investment required for the Whitby location may increase to $35M if a hotel is determined to be feasible at this location.

For the purposes of this financial assessment, an average of $8M will be used for the initial development phase. It is assumed a second phase of development may significantly expand the facility after five years of operation, depending on market demand.

This initial investment includes all bath, sauna, body treatment, relaxation area, boutique, and restaurant and bar facilities. A zero-gravity saltwater pool and accommodations are not included in this initiative investment.

The operations of the Nordic spa will require approximately 30 staff members. These include: a General Manager, a Restaurant and Bar Manager, three Restaurant and Bar Servers, a Boutique Manager, a Boutique Customer Service Representative, four Massage Therapists, four Estheticians, ten Pool Staff, three Yoga Instructors, and two Receptionists. It should be noted that many of these positions will only be required part-time.

The thermal bath experience should range between $50-$70 to remain competitive in the marketplace. Massage and body care treatments tend to range between $100-$160. Specialty treatments, such as access to a zero-gravity saltwater pool – usually cost an additional $40-$70. Additional revenue may also be derived from food, drinks, and boutique merchandise.

For the purposes of this financial assessment, it is assumed that clients will spend on average $120 per person on the Nordic spa’s different services. Average daily patronage is projected to be 50 clients/day for 365 days a year.